NEW YORK and SHANDONG, China, May 25, 2011 (GLOBE NEWSWIRE) -- Tsingyuan Brewery Ltd. (OTCQB:BEER), a Shandong-based manufacturer and distributor of brewer's malt and beer in China, today announced results for the first quarter ended March 31, 2011.
Q1 2011 financial highlights:
- Revenue increased 441.8% to $21.1 million
- Gross profit increased 529.1% to $4.2 million
- Gross margin increased 278 basis points to 20.1%
- Operating income increased 423.0% to $3.4 million
- Net income increased 404.4% to $2.6 million, or $0.02 per diluted share
Zhang Dingyou, Chief Executive Officer, commented, "We are very pleased to report a 442% increase in revenue to $21.1 million, which resulted from strong growth in both our malt and beer segments. At the same time, gross margin on our beer products increased to 27% in the first quarter of 2011, from 15% for the same period last year. The demand for beer in second- and third-tier cities has grown rapidly, due in part to increasing disposable income in these areas. We attribute Tsingyuan's success to our ability to offer high quality and low cost beer, which appeals to consumers in our target markets. Specifically, our beers are crafted from high quality raw materials using advanced brewing techniques. As the largest malt producer in Shandong, our ability to internally source malt provides us a distinct pricing advantage. "
"Looking ahead, we plan to aggressively expand our distribution network, which already spans six provinces in eastern and northern China. In the first quarter alone, we added over 20 new sales representatives and launched a nationwide advertising campaign, which has helped drive awareness for our products. As we increase penetration of our target markets, we also plan to expand our production capacity to accommodate the growing demand. In the second half of 2010, we added a new canning line, which increased our beer production capacity to 98,000 metric tons. In 2011, we plan to further expand our beer production capacity through the addition of new bottling lines. Overall, we have built a highly scalable infrastructure with a well-established brand, which should allow us to achieve our goal to become one of the leading national beer companies in China."
Revenue for the first quarter ended March 31, 2011 increased 441.8% to $21.1 million, compared to $3.9 million for the first quarter ended March 31, 2010. Gross profit increased 529.1% to $4.2 million for the three months ended March 31, 2011, compared to $0.7 million for the first quarter ended March 31, 2010. Operating income increased 423.0% to $3.4 million for the three months ended March 31, 2011, compared to $0.7 million for the same period last year. Net income for the three months ended March 31, 2011 increased 404.4% to $2.6 million, or $0.02 per diluted share, compared to $0.5 million, or $0.00 per diluted share, for the same period last year.
About Tsingyuan Brewery Ltd.
Tsingyuan Holding Inc., located in Shandong province, is a leading manufacturer and distributor of brewer's malt and beer throughout northern and eastern China. Tsingyuan Holding has two business lines: brewer's malt and beer production. The brewer's malt is currently shipped to brewers in ten provinces across China. The beer products are distributed throughout six provinces, and are well-renowned for their high quality yet affordable price. The company utilizes the latest German brewing techniques and uses the highest quality barley, water and hops. Tsingyuan promotes nine products under its trademarked brand names "Qinglin," "Qingyi," and "Qingyuan."
This release contains certain "forward-looking statements" relating to the business of the Company. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| March 31, 2011 | December 31, 2010 | |
| (Unaudited) | ||
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 75,051 | $ 1,117,383 |
| Accounts receivable | 195,814 | 2,710,730 |
| Inventories | 7,872,690 | 2,358,178 |
| Advances to suppliers | -- | 62,949 |
| Other receivables | -- | 35,945 |
| Total Current Assets | 8,143,555 | 6,285,185 |
| Plant and equipment, net of accumulated depreciation of $3,023,712 and $2,747,621 at March 31, 2011 and December 31, 2010, respectively | 17,345,977 | 17,462,287 |
| Intangible asset, net | 1,443,369 | 1,442,271 |
| Advance for long term assets | 5,351,063 | 151,722 |
| Total Assets | $ 32,283,964 | $25,341,465 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable and accrued expense | $ 1,639,810 | $346,798 |
| Advances from customers | 891,230 | 322,943 |
| Taxes payable | 2,799,613 | 2,978,635 |
| Due to related parties | -- | 519,381 |
| Total Current Liabilities | 5,330,653 | 4,167,757 |
| Stockholders' Equity: | ||
| Preferred stock, Series B -- ($0.001 par value, 1,000 authorized, no shares issued and outstanding) | -- | -- |
| Common stock ($0.001 par value, 300,000,000 shares authorized, 126,857,289 shares issued and outstanding as of March 31, 2011 and December 31, 2010 respectively) | 126,857 | 126,857 |
| Additional paid in capital | 14,065,434 | 11,012,046 |
| Statutory surplus reserves | 832,981 | 832,981 |
| Retained earnings | 9,739,553 | 7,155,952 |
| Accumulated other comprehensive income | 2,188,486 | 2,045,872 |
| Total Stockholders' Equity | 26,953,311 | 21,173,708 |
| Total Liabilities and Stockholders' Equity | $32,283,964 | $ 25,341,465 |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||
| For The Three Month Periods Ended March 31, | ||
| 2011 | 2010 | |
| Sales | $21,077,475 | $3,890,286 |
| Cost of goods sold | 16,850,631 | 3,218,398 |
| Gross profit | 4,226,844 | 671,888 |
| Operating expenses: | ||
| General and administrative expenses | 494,109 | 12,451 |
| Selling expenses | 323,647 | 7,608 |
| Total operating expenses | 817,756 | 20,059 |
| Income from operations | 3,409,088 | 651,829 |
| Other income (expense): | ||
| Interest expense | -- | (57,379) |
| Interest income | 1,426 | 9,426 |
| Other income (expense) | 281,263 | (45,634) |
| Total other income (expense) | 282,689 | (93,587) |
| Income before income taxes | 3,691,777 | 558,242 |
| Income taxes expense | 1,108,176 | 46,070 |
| Net income | 2,583,601 | 512,172 |
| Other comprehensive income: | ||
| Foreign currency translation adjustment | 142,614 | 11,951 |
| Comprehensive income | $2,726,215 | $524,123 |
| Earnings per share - basic and diluted: | ||
| Weighted-average shares outstanding, basic and diluted | 126,857,289 | 125,107,671 |
| Earnings per share, basic and diluted | $0.02 | $0.00 |